Investors crave more strong bank results

NEW YORK (Reuters) – U.S. bank funds are flying high, and next week’s earnings could bestow investors more reason to be optimistic about the sector.

Strong results from JPMorgan Chase & Co forward Friday bolstered expectations for top U.S. banks, many of which are due to report next week, including Citigroup and Goldman Sachs.

Financials possess been among market leaders in the recent rally, with the Standard & Poor’s 500 posting its seventh straight week of gains on Friday.

While the earnings outlook is custody alive hopes that stocks have more room to run higher, the ascend in bank shares has pushed sector indexes to near resistance levels, that could signal a rest stop for the shares in the holiday-shortened week.

The place of traffic will be closed Monday in observance of Martin Luther King Jr Day.

JPMorgan Chase on Friday reported profit and revenue that were stronger than analysts had expected, and the CEO declared the bank could start to increase its dividend once regulators give the go-ahead, likely at the end of March.

Analysts declared the news bodes well for other financials, most of which are owed to report results next week.

“Financials could very easily have existence one of the real darlings of this particular earnings cycle,” declared Burt White, managing director and chief investment officer of LPL Financial in Boston.

Financials are projected to desire by far the highest growth rate in earnings for the fourth locality, largely because of easy year-ago comparisons, according to Thomson Reuters given conditions.

Overall, S&P 500 earnings are expected to have increased ~ dint of. 32 percent from a year ago, the data showed.

Besides the banks, housekeeping bellwether General Electric as well as marquee tech names Apple, Google and eBay are due to report.

DREAMING OF BANK DIVIDENDS

Investors have been keen as being news on when bank dividends will be reinstated, and when it happens, it’s going to narrow-minded more investment in financials, White said.

“Once they start (profitable dividends) … you’re going to see an enormous substance of buying from yield-starved investors, as well as funds and ETFs (swap-traded funds) that really are going to have to relook at the rural scene and put financials back in there,” he said.

Among other utmost height banks reporting next week are Morgan Stanley, Bank of America and Wells Fargo & Co.